According to Section 2(20) of the CGST Act, 2017, a casual taxable person is a person who occasionally manages transactions involving the supply of goods or services or both. This transaction must occur in the course of or furtherance of business, whether at the capacity of a principal, agent, or any other, in a State or Union territory where the applicant doesn’t have a fixed place of business. Hence, if the person undertakes any business activity taxable under GST and such business is temporary or occasional and will last for a short time in a state wherein the person doesn’t have his usual place of business. He must undertake registration as a casual taxpayer to indulge in such transactions.
An example of casual registration is participating in an exhibition in another state. Hence, when a taxable individual participates in an exhibition outside the state where his usual place of registration exists, he should register as a casual taxpayer to carry out the sale and purchase of goods in the other state.
A comprehensive guide to obtaining casual taxpayer registration
The liability to register under GST occurs when the person is a supplier and the aggregate turnover in a particular financial year exceeds the limit of 20 lakhs. However, multiple categories of suppliers are required to undertake compulsory registration irrespective of their turnover. Here, the threshold limit of 20 lakhs does not apply to such suppliers. One such supplier would be a Casual Taxable Person (CTP).
A casual taxpayer cannot opt for a composition scheme under GST and must obtain a temporary registration valid for a maximum period of ninety days in the state from where the person seeks to supply in the capacity of a causal taxable person. A CTP is required to make an advance GST deposit based on the tax liability estimation.
Here, the definition of a person includes individuals, a company inclusive of a government company, a firm, a limited liability partnership, a body of individuals, a cooperative society, a local authority, and a government inclusive of a corporation.
The definition of principal place of business consists of the place of business specified as the principal place of business specified in the certificate of registration.
Step-by-step instructions for the casual taxpayer registration process
The step-by-step process for the registration of a casual taxpayer is as follows:
- The first step is to apply for registration by declaring PAN, email, and mobile number in PART A of Form GST REG-01.
- Next, validate and verify the PAN, email, and mobile numbers through the OTP.
- By successfully verifying, a temporary reference number is generated. An advance tax deposit will be made using the temporary reference number, and an acknowledgment for a deposit, Form GST REG-02, will be generated electronically.
- The applicant can fill and submit PART B of FORM GST REG-01 electronically using the generated reference number.
- The next step is the electronic issuance of the registration certificate once the tax deposit appears in the electronic cash ledger.
- The Casual Taxable Person can make taxable supplies after the receipt of the Registration Certificate is generated.
This certificate’s validity period is specified in the application or ninety days from the date of registration, whichever falls earlier.
Understanding the online registration portal and its functionalities
A casual taxable person must apply for registration at least five days before the commencement of business. There is no special form to register as a casual taxpayer. However, the normal FORM GST REG-01 used by other taxable persons can also be used to obtain registration by casual taxable persons.
Any person registering as a casual taxpayer must apply by declaring their Permanent Account Number, mobile number, and email address along with their state or Union territory in Part A of FORM GST REG-01 on the common GST online portal. This takes place directly or through a facilitation center notified by the Commissioner. The PAN is validated online via the common portal through the database maintained by the Central Board of Direct Taxes. The mobile number is verified via a one-time password, the same for the email address.
Once the verification is successful, a temporary reference number is generated, which helps the applicant electronically apply PART B of FORM GST REG-01. This is duly certified through an electronic verification code along with the documents mentioned in the form on the common portal either through a Facilitation Centre or directly.
This is followed by the applicant being given a temporary reference number through the common portal. For making a mandatory advance deposit of tax for an amount that equals the tax liability of the person covering the period for which registration is undertaken. Since the registration is online, the certificate is issued electronically after the deposit appears in the electronic cash ledger.
Then, this amount is credited to the electronic cash ledger of the casual taxable person. On depositing the amount, an acknowledgment is electronically issued to the applicant in FORM GST REG-02. The casual taxpayer can make taxable supplies only after issuing the registration certificate. Additionally, to extend the registration period, the application must be submitted electronically through the common portal or directly via a Facilitation Centre notified by the Commissioner. The extension application must be submitted in FORM GST REG-11 before the end date of the registration validity.
Also Read: How To Do GST Registration Online
Preparing and submitting documents for casual taxpayer registration
The process of registering as a casual taxpayer involves multiple documents, which are mostly the same as a normal registration. The registration might require documents about the place of business where the business is to be carried on temporarily.
For instance, in case of casual registration for an exhibition event, copies of documents about the exhibition are required. This includes documents relating to payment for the booth allocated, the consent or communication letter allotting the space for the exhibition with an official letterhead, etc.
The following documents are required for one to register as a casual taxpayer:
- Copy of the PAN card of the applicant along with the mobile number and email address for communication and OTP
- The name of the business or trade
- Any existing registration of the applicant, such as GSTIN, Registration, or incorporation document with other authorities like MCA
- Copy of incorporation document serving as evidence of the existence of the applicant
- Details of the applicant’s partners, directors, or promoters, along with copies of their ID and address proofs such as PAN, email, mobile number, bank details, Aadhar Card, etc.
Here, bank details can include:
- A copy of the passbook.
- A bank statement with the applicant’s name.
- A canceled cheque from the firm.
- Details of the principal place of business address, along with documents serving as evidence of the ownership of the premises. This can include the electricity bill, property tax receipt, or the legal ownership document of where the business is to be carried on.
- Nature of business of the applicant and any additional place of business along with documents
- An authorization letter on the applicant’s Letter is required to authorize one or more people to sign all the documents related to the GST
The authorization letter is to be signed by persons other than the people considered as authorized signatories. However, the authorization letter is not required in the case of proprietorship. The applicant can offer state-specific registration if applicable. Tax challan on the estimated supplies made during the time of casual registration.
It is also important for the applicant to specify the top five products or services provided by the applicant’s business.
Verifying and validating registration information
Verifying and validating every document required for registering the applicant as a casual taxpayer is essential. The process also entails returns and refunds by a casual taxable person.
A casual taxable person is required to furnish returns electronically via the common portal either via a Facilitation Centre notified by the Commissioner or directly. One needs to showcase the following returns when verifying registration information:
- FORM GSTR-1 gives the details of outward supplies of goods or services
- FORM GSTR-3B that offers the summary of supplies along with tax payments.
It is important to note that any annual return is not required to be filed by a casual taxable person as normally registered taxpayers require.
As for the refund by a casual taxpayer, the casual taxpayer is eligible for the refund of any balance of the advance tax deposit by the applicant after adjustment of the tax liability.
After the applicant has adjusted their tax liability, the balance advance tax deposit can be then refunded.
After the applicant has furnished all the returns and the entire period for which the certificate of registration was granted to the applicant remains in force, the balance of the advance tax deposit can be refunded.
Completing the registration process and obtaining casual taxpayer registration
Once the applicant submits all the documents and files the refund and returns compliances, they are granted the casual taxpayer status with a specific validity of ninety days, subject to extension.
If the casual taxable person has opted for the Quarterly Returns with Monthly Payment scheme, the applicant has to file GSTR-1 and GSTR-3B every quarter. Moreover, a casual taxpayer is not required to file an annual return as required to pay by a normally registered taxpayer.
Registering as a casual taxpayer is simple and doesn’t entail many steps. Since the process can be carried out online on the GST portal, it makes it easier for applicants to register to carry out business temporarily in a taxable territory. This also helps in the furtherance of business.
Q1. Can the validity period of a casual taxpayer registration be extended?
Yes. The validity period of 90 days can be extended to a further period not exceeding another ninety days. This extension will be allowed only on payment of an additional tax equal to the estimated tax liability for the extended period.
Q2. How does a taxpayer register for long-running exhibitions?
In the case of long-running exhibitions exceeding 180 days, the taxable person must undertake normal registration and not obtain registration as a casual taxable person. This requires a copy of the allotment letter granting the applicant use of the premises for exhibition serving as proof of place of business. When the exhibition is over, the registration can be surrendered.
Q3. What is the due date for furnishing returns as a casual taxpayer?
The due date for filing FORM GSTR-1 consisting of details of outward supplies of goods and services is on or before the 11th of the following month. The due date for filing FORM GSTR-3B, consisting of the summary of ITC, tax liability, and purchases, is on or before the 20th of the following month.
Q4. What is the difference between a normal and a casual taxpayer?
Most businesses in India fall under the normal taxpayer category. Businesses with annual turnover over Rs 40 lakh in a financial year must register as normal taxpayers. As for casual taxpayers, it pertains to occasional and seasonal businesses. Businesses must deposit equivalent to the GST liability from their occasional operations.
Q5. When is a casual taxpayer allowed to make supplies?
A casual taxpayer can start making taxable supplies only after the advance deposit has been paid and after the issuance of the certificate of registration. The registration certificate is valid for the period in the application of registration or ninety days, whichever falls earlier.
Q6. Do casual taxpayers have to deposit any tax in advance?
Yes. A casual taxpayer must make an advance tax deposit in advance for registration. The amount to be paid in advance is equal to the applicant’s estimated tax liability for the tenure of registration.
Q7. What happens after a casual taxpayer makes an advance tax deposit?
Once the advance tax deposit has been made, the Common Portal will give the applicant a temporary reference number. The registration certificate is issued electronically after the deposit appears in the electronic cash ledger.
Q8. Is it necessary for a casual taxpayer to register?
Yes. The taxpayers who meet the criteria for a casual taxable person except those supplying specified handicraft goods must register under GST.
Q9. Is a casual taxpayer allowed to pay tax under the composition scheme?
No. A casual taxable person cannot pay tax under the composition levy.
Q10. Is there a monetary limit for casual taxpayers to register under GST?
No. There is no monetary limit for registration for casual taxpayers. All individuals who temporarily hold business at a taxable location must be registered under GST. This doesn’t apply to applicants engaging in the supply of handicraft goods. These suppliers must register only if their annual turnover is over 20 lakhs or over 10 lakhs concerning special category states.